Sunday, May 6, 2012

Why Domestic Drilling Will Not Lower Gas Prices

(Originally posted to FB last year which is why the link is dead. Google "fracking" to learn more about the substance of the article)

Here's an article. 

It's all about this cool new drilling technique that allows us to drill horizontally and inject poison into the ground which 'cracks' shale and loosens the oil and natural gas that's trapped inside it. According to this article, there's a vast reserve of such shale-bound hydrocarbons out west and we'll all be merrily filling our tanks with it in just a few short years. Experts and analysts claim output could be as high as 2 million barrels a day by 2015! Sounds good right? Well . . . except for the fact that domestic consumption is already sitting at 21 million barrels a day. But hey, it's progress, right?

So here's what must happen to make gas prices drop.

There must be a joint effort between the Bureau of Land Management and the Department of Energy . . . our employees

Together, these agencies must venture out onto public land with public money and start erecting oil drilling hardware. We'll need a new "Conservation Corp" push for all the manpower that will be needed to support this massive public undertaking, of course, for the public good.

Public employees will set out on public land with public money, operating public drilling platforms, which extract the mineral resources that are the collective property of the people of the United States of America. Then, once that oil and natural gas are sucked out and the poison that cracked the shale has seeped harmlessly into the aquifers and ground water, the oil will be piped via publicly owned pipeline or on publicly owned tankers to U.S. Department of Energy refineries where that public resource will be turned into usable gas, diesel, kerosene and what have you.

Then more trucks transport that finished product to publicly owned, co-op managed gas stations located all over this great nation . . . AND NOWHERE ELSE. This is OUR gas after all.

Then good folks like you and me can drive down the street where we can choose between the privately owned, for-profit gas stations, who charge a price based on global supply and global demand, or we can choose our publicly owned, non-profit gas station whose prices are set at COST plus a 3% margin.

Consumer choice! How about that?

Naturally, the publicly owned stations will have much cheaper gas than the private ones, so the privates will have to lower their prices to compete, and that's it!!!!! Cheaper gas!!!!!!

Oh but wait . . . I forgot.

We don't have public gas stations or tankers or refineries or platforms or workers.

That's all private. Here's how it really works.

Taxpayers give corporate welfare (they call it "subsidies") to Exxon/Mobil, BP/Ammoco,  and Royal Dutch Shell to help them out. They need a little upfront to get started you see, it's not like they're quadrillionaires or something.

Then once they manage to find some oil on public land, they have a little game of jump-rope with the Bureau of Land Management who authorizes new drilling. Once those rights are secured, that's it . . . it's no longer OUR OIL. The BLM signs it away and then it gets pumped out and tossed into the global market where OUR OIL gets lost in a dizzying maze of markets that open and close as the world spins.

Global supply and demand sets the price and that's all she wrote. It doesn't matter if that shale was directly underneath YOUR ASS, saturated with oil that's been slowly decomposing since the cretaceous period, you will pay NO LESS for gas just because it was extracted within the legal border of the United States.

All this "We" and "Our" terminology is just a big, fat, stinking lie. The 2 million barrels a day we can hope to get out of this poison cracking effort will lower gas prices only in proportion to how much it offsets GLOBAL demand.

Global demand in 2009 was up to 88.6 million barrels per day. By 2015 it's projected to be as high as 95 million barrels a day, which means OUR awesome new source will represent just a tad more than 2% of the global demand. What would a 2% reduction in the price of gas at the pump mean today?

Gasoline averages $3.70 nationally so that's a whopping $0.074 . . . rounding down we'll call it 7 cents.

7 cents y'all . . . that's OUR CUT.

How much will the big three oil companies make? Well they profited about $6.22 per barrel as of 2009 so they're looking at $12.44 million per day AFTER COSTS (which, as I've already mentioned . . . we taxpayers are subsidizing with corporate welfare).

They get $4.54 billion per year in profit by thrashing public land and pumping poison into the water that people and livestock drink . . .

We save 7 cents per gallon at the pump. With a 16 gallon fill up, that's $1.12!!!! 

Almost enough for a bottle of non-toxic water!

Well what are we waiting for America?


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